Lakhmi Chand Charitable Society Vs PCIT (ITAT Delhi)
Section 12A Registration Cancellation Quashed for Lack of Jurisdiction and Invalid Statutory Invocation: ITAT Delhi
The assessee, a charitable society running G.D. Goenka Public School, challenged the order of the Principal Commissioner of Income Tax (Central)-3 cancelling its registration under Section 12A read with Sections 12AA and 12AB(4) for Assessment Years 2015-16 to 2021-22. Following a search conducted on 14.10.2020, the Assessing Officer completed assessments on 29.03.2022 and thereafter made proposals for cancellation of registration, alleging non-genuine activities, diversion of income, and violations of Sections 11(1)(a), 11(1)(d) and 13(1)(c). Based on these proposals, the PCIT issued multiple show cause notices and ultimately cancelled the registration.
The assessee challenged the cancellation on several grounds, contending that the PCIT lacked jurisdiction as the authority to grant or withdraw registration vested with the Commissioner of Income Tax (Exemptions); the transfer of the assessment under Section 127 was only for coordinated assessment and did not transfer powers relating to cancellation of registration; the reference under the second proviso to Section 143(3) was made after completion of assessment proceedings; Section 12AA could not be invoked after 01.04.2021; Section 12AB(4), introduced with effect from 01.04.2022, could not be applied to alleged violations relating to earlier assessment years; cancellation could not operate retrospectively; and the proceedings relied upon retracted statements, electronic evidence and other material without adequate opportunity or cross-examination.
